Jeffrey A. Hirsch - Commodity Traders Almanac 2012

Copyright 2012 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey
Published simultaneously in Canada

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Additionally, the risk of loss in trading futures and options can be substantial; therefore, only genuine risk funds should be used. Futures and options may not be suitable investments for all individuals, and individuals should carefully consider their financial condition in deciding whether to trade. For information on the CFTC Disclosure of Risk or the CFTC Consumer Advisory on Seasonality visit http://www.CFTC.gov and/or http://www.cftc.gov/enf/enfseasonaladvisory.htm .

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ISBN 13 978-1-118-07847-1

INTRODUCTION TO THE SIXTH EDITION

Once again it is that time when we are proud to release the next edition of the Commodity Traders Almanac . The new 2012 editionthe sixth edition has gone through more exhilarating additions. For starters, we have included a primer on options and spread trading with simple directional option trading strategies and some seasonal futures spread trades on pages 69. We have also added more exchange traded funds (ETFs), and new this year, some exchange traded notes (ETNs). ETNs are similar to exchange traded funds, but differ in structure. ETNs are products that are issued as senior debt notes, while ETFs represent a stake in an underlying market.

The difference between ETNs and ETFs comes down to credit risk versus tracking risk. ETNs possess credit risk. If the company holding the note goes bankrupt, the investor may not receive the return he or she was promised. An ETF, on the other hand, has virtually no credit risk, but there is tracking risk involved with holding an ETF. In other words, there is a possibility that the ETFs returns will differ from the returns of its underlying market.

ETFs and ETNs allow traders with limited capital or risk tolerance to diversify in various markets and sectors, or to take advantage of trading opportunities in stocks, futures, commodities, forex, countries, and more. Traders can mix strategies, such as pursuing short term objectives versus taking advantage of long term trend opportunities. ETFs and ETNs also allow traders the availability to use options via electronic order entry.

On pages 118 and 119, we have removed the 2013 Strategy Calendar and replaced it with a complete listing of all the Futures First Notice Days, and Last Trading and Option Expiration Dates for all 19 markets covered. For the third Friday of the month when equity, stock index, ETF, and ETN standard options expire, we have encircled the dates in the 2012 Strategy Calendar on pages 10 and 11 and added a witch to those dates in the weekly calendar pages. Three witches appear on Triple Witching day, the third Friday at the end of each quarter in March, June, September, and December when equity index futures expire. New case studies appear on pages 121125, and the COT report is updated on pages 130132.

Many of the trades in 2011 were outstanding, but there were the typical busts where trades did not fare so well. However, armed with the information packed in these pages, the trader has better odds for overall success. Part of the path to better trading results lies in risk as well as trade management. Several tools may help traders determine if a trade is worthy of resources and consideration. Each featured trade shows the statistics of each year, allowing you to review past performance as a guide to what the average typical profit and loss has been for each specific trade.

This years edition will prepare you for the most active and pertinent trading opportunities on a monthly and seasonal basis by showing you the following:

Seasonal tendencies and the respective potential risks and rewards

Detailed statistical data on past market price action

Insights on options and spread strategies to help manage your risks

The nuances of trading the various aspects of related markets

Annual highs and lows for the top commodity markets

Reminder alerts on trades on the calendar pages

First Notice, Last Trade, and Options Expiration on the calendar pages

Contract specifications with highly correlated ETFs, ETNs and stocks

It is important to remember to use this Almanac as a reference guide and to compare current events against history. We have included the data that allows the reader to distinguish which years had predominantly bigger price moves and to compare where current prices and trends stand against past historic data.